Nestle developing a taste in China

By Jiang Wei (China Daily)
Updated: 2007-11-12 13:32

Coffee was first brought to China by French missionaries early in the 20th century, but it had difficulty finding consumers in a country so deeply rooted in the local tea culture.

Yet Swiss food giant Nestle has made significant inroads in the Chinese market with its instant coffee Nescafe over the past two decades.

David Saudan, coffee and beverages business unit head with Nestle Greater China Region, believes the company's marketing programs targeting the youth contributed greatly to its success.

Nescafe eyed young consumers aged from 18 to 35 when it first introduced instant coffee to the Chinese market in the 1980s. The target group was later narrowed to those 18 to 25 years old, with university students the core customers.

From the very beginning, Nescafe understood it was important to be close to university students, Saudan says, because although not as affluent as professional people already employed, "they will become opinion leaders in the future".

"Marketing to university students is not an idea we have had only for one or two years. It is something that will sustain for the long term," he says. "It is very similar to our overall business strategy - when we invest in something, we are very serious about it and we want to do it over the long haul."

To further access young consumers on campus, the company is cooperating with university coffee shops in a number of cities across China including Beijing, Shanghai, Chengdu and Wuhan.

Nescafe helps coffee shops at universities to decorate their shops for free, including with the Nescafe image or pictures of its iconic red mug.

"Sometimes there are no brand names even," Saudan says.

With coffee shops more attractive, "it makes students happy because they have comfortable places to meet friends," he says. "It also makes operators happy because it improves their business and makes Nescafe happy because it impresses consumers."

There are to date 200 such college coffee shops in China. Saudan expects the number will grow to 300 by the end of the year.

Nescafe also sponsors student activities and connects with the young audience through its website, TV and print advertisements, radio music programs and sponsorship of bands.

"This year, it is a continuation of our very successful university program. We will continue it for many years," Saudan says.

University fads and student tastes change constantly, so the company strives to retain their attention through interactive and participatory events, he adds.

He says Nescafe's effort is to "partner with university students when they study, when they surf the Internet, when they chat with friends in their dormitory rooms, or when they want to enjoy a moment of quiet reflection alone".

Nescafe's efforts appear to have worked - it was again selected as the most preferred coffee in a "most loved brands" survey, the most extensive evaluation of university students' consumption habits and brand preferences in China.

Although many still say it is hard to develop a taste for coffee in China, which has a thousand-year-old tea culture, Saudan does not see it as a bad environment for coffee sales.

"It's a great environment for coffee because if people have such a tea culture they might be curious to discover another beverage and they might be open to try new things," he says.

Nescafe markets different types of instant coffee in China, including Nescafe 1+2, Nescafe Rich, ice coffee and Nescafe Yunnan, whose coffee bean was grown in Yunnan Province.

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